Is PH economy in a crisis? Not yet, but government should change stance: economist

ABS-CBN News

Posted at Sep 24 2022 10:11 AM | Updated as of Sep 24 2022 10:55 AM

MANILA - Although it cannot be considered a full-blown economic crisis yet, an economist believes the Philippine government should change it stance as the peso continues to weaken.

According to Prof. Emmanuel Leyco, the government should be more defensive and strategic in dealing with the current economic issues since many Filipinos may already be in crisis due to soaring prices.

"Pero sa karamihang mga Pilipino, krisis na ito. Kaya po sana ituring na ito ay mabigat na pinagdaraanan ng mga mamamayan, lalong lalo na ‘yung mga hindi stable ang kinikita," he said.

(But for majority of Filipinos, this is a crisis. So it should be considered as a heavy burden for our citizens, especially those who do not have stable income.)

"Short of declaring an economic crisis, kailangan magkaroon tayo talaga ng defensive, na strategic na position sa economy. Mas maging sensitive tayo doon sa mga mamamayan na walang hinuhugot habang pataas nang pataas ang presyo, at strategic tayo na ito siguro ang isang magandang aral sa atin na palakasin ang ating internal economy, panloob na kabuhayan, at huwag tayong masyadong umasa sa ating importations," Leyco added.

(Short of declaring an economic crisis, we should have a defensive, strategic position in the economy. We should be more sensitive to those who do not have spare income as prices continue to rise, and be strategic to look into this situation and strengthen our internal economy so we don't have to depend on importations.)

he Philippine peso fell to a new record low for the fourth straight day on Friday, closing at P58.50 against the US dollar.

Friday's close is worse than Thursday's P58.49. 

The US dollar rallied, which resulted in the depreciation of other currencies including the peso, after the US Federal Reserve announced another 75-basis point big time rate hike to cool down inflation.

As the value of the peso continues to drop, the National Economic and Development Authority is betting on the influx of "pamasko" and holiday remittances to strengthen the peso against the US dollar in November and December, an official said Friday.

Leyco, however, believes the Philippines cannot just depend on remittances, since the overseas Filipinos are also affected by the worldwide economic downturn.

"Pero tandaan natin, ang Amerika mismo ay malaki ang inflation, mataas ang inflation, so ‘yung mga kapatid nating nasa Amerika, eh kinakarga din nila ang inflation doon," he said.

(But we should remember, the US is also experiencing inflation, so our fellow Filipinos in the US are also suffering from it.)

"Kaya pa kaya ng ating mga kapatid na OFW na dagdagan pa?" Leyco added.

(Can they really send more?)

Leyco also said that the government should think about ways of helping the Filipinos in the country while also considering the overseas Filipinos who might not be able to send more remittances.

"Totoo ‘yun na talagang malaki ang tulong ng ating mga OFW sa ating ekonomiya, pero sila mismo may inflation ding kinakarga doon at napipilitan silang magdagdag ng kanilang ipinapadala dahil sa patuloy na pagtaas ng presyo ng bilihin dito sa Pilipinas," he said.

(It is true that our OFWs are a big help to our economy, but they themselves are suffering from inflation and are forced to send more to the Philippines because of the increasing prices.)

"Isipin din natin na may pinagdadaanan din ang ating mga kapatid na OFW. Sa akin, bagama’t magandang isipin na mayroon pang darating, okay lang ‘yun, pero tingnan na rin natin kung ano pa ang pwedeng magawa dito sa ating bayan para maaddress natin ang patuloy na pagtaas ng presyo," Leyco added.

(We should also think of what our OFWs are experiencing. Although it is nice to think that can expect more, but we should also look at what we can do here to address the issue.)

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Inflation is seen to average at 5.6 percent in 2022, higher than the previous Bangko Sentral ng Pilipinas forecast of 5.4 percent. 

The consumer price index slightly eased to 6.3 percent in August from 6.4 percent, but it remains above the government target of 2 to 4 percent.